Tesla’s Q1 Results: Will it Exceed Expectations Once More?

Tesla's Affordable Dream Car Hits Roadblock: Investor Alert

Tesla (TSLA:NSD), the foremost electric vehicle (EV) manufacturer, will report its first-quarter earnings on April 19 after the market closes. The crucial issue is whether TSLA will exceed earnings projections for the tenth consecutive quarter.

The investors were not pleased with Tesla’s Q1 deliveries of 422,875 vehicles, which, despite a 36% YoY increase, were lower than the quarter’s production of 440,808 vehicles. This has raised concerns about an ongoing inventory buildup, and investors are eager to learn the impact of Tesla’s multiple Q1 margin cuts.

Elon Musk, the CEO of Tesla, has caused a price war in the EV market by slashing prices in the United States, Europe, China, and other regions. Last week, Tesla announced yet another round of price discounts in the United States in an effort to increase demand in the face of macroeconomic pressures and intensifying competition.

Regarding the impact of these price reductions on Tesla’s margins, analysts are divided. Ben Kallo, an analyst at Baird, reaffirmed Tesla’s Buy rating and $252 price target, believing the company can deliver industry-leading operating margins and withstand economic headwinds. In contrast, Colin Langan of Wells Fargo reaffirmed a Hold rating and set a price target of $190, anticipating that Tesla’s Q1 auto gross margins will fall short of the target of greater than 20%.

 

Tesla Stock Forecast:

The consensus estimate for Q1 EPS on Wall Street is $0.86, representing a decline of nearly 20% year-over-year, while revenue is expected to increase by over 26% to $23.73 billion. Nonetheless, tesla.com visits increased 23.4% year-over-year in Q1 2023, indicating a positive trend for Q1 revenue.

Tesla has a consensus rating of Buy on Wall Street. The average price target of $215.39 for Tesla stock indicates a nearly 19% upside potential.

TSLA Ratings by Stock Target Advisor

Following price cuts in key markets, investors will concentrate on Tesla’s Q1 margins, management’s comments on demand in a challenging macro environment, and any updates on new models.

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